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Europe 4.0: Sharing the New Economy

Workshop, May 28 – 29, 2019, Vienna, Austria

Europe is facing a crucial time not only politically but also economically. In the next five years we will experience many new technological breakthroughs that will reshape Europe’s economies. But will this digital disruption make Europe a better place? This two-day workshop hosted by the World Bank Group (WBG) brings together practitioners in Europe and researchers from around the world to identify the promises and pressures created by these changes, to share experiences and concerns, and to help shape the narrative and messages of a new World Bank flagship report. The report, titled Europe 4.0: Sharing the New Economy, will analyze, quantify, and explain the impact of informational, transactional, and operational technologies on the geography of production and prosperity in Europe, and suggest measures to make Europe’s economy simultaneously competitive, inclusive, and integrated.

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Day 1

Tuesday, May 28, 2019; WBG Vienna, Praterstraße 31 17th floor, room 17-6, code: 5589+ok

08:30 09:00

Registration and Welcome Coffee Welcoming Remarks

• Linda van Gelder · Country Director, Western Balkans, World Bank Group

• Elisabeth Gruber · Director, International Financial Institutions, Ministry of Finance of Austria

09:15 Opening Panel. Industry 4.0: Can Europe lead the digital economy?

A discussion moderated by Arup Banerji, Regional Director, World Bank Group

The digital transformation promises greater efficiency, higher quality products and services, and welfare gains. Industry 4.0 is changing firms, consumers, and markets, reshaping the geography of production in Europe, and altering the economic relations between Europe and the rest of the world. Countries across Europe are making progress in adopting new digital technologies, but progress is uneven and considerable potential remains unrealized. This panel will discuss the impact of the data economy on Europe’s competitiveness and debate the policy implications for services liberalization, the regulation of

data, the policy framework for competition, and the interventions to support enterprise and innovation.

Europe 4.0 – Early Findings

• Wolfgang Fengler · Lead Economist, World Bank Group

Panelists:

• Peter Berkowitz · Head of Unit for Smart and Sustainable Growth, Directorate General for Regional and Urban Policy, European Commission

• Mary Hallward-Driemeier · Senior Economic Adviser, World Bank Group

• Michael Hirschbrich · Co-Founder and Chief Executive Officer, Updatemi

• Marialisa Motta · Practice Manager, FCI, World Bank Group

10:40 Takeaways: Arup Banerji, World Bank Group 10:45

Coffee Break and Networking

11:00 Technical Session 1. Digital platforms and new technologies: How is Europe performing?

The impact of new digital technologies, including platforms and production innovation, on the

geographical concentration of economic activity in Europe.

Moderator: Wolfgang Fengler · World Bank Group Demand-driven digitization in Europe: Connecting demographic and economic projections with the data on digital platforms

• Jesus Crespo · Professor of Economics, Vienna University of Economics and Business

Discussant: Indermit Gill · Professor of the Practice of Public Policy, Duke University The adoption of (digital) technology by firms: Preliminary estimates from a pilot survey

• Xavi Cirera · Senior Economist, World Bank Group

Discussant: Dominique Foray · Full Professor, Ecole Polytechnique Federale de Lausanne

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18:00 19:00

End of Day 1 Event Dinner at Café Ansari; Praterstraße 15

12:30

Lunch and Networking

14:00 Technical Session 2. Industry 4.0 Champions: Where in Europe will they be?

Comparing the size and location of existing knowledge hubs with the expected distribution of Industry 4.0 technology and knowledge production hubs—surmised from research input and output data—to forecast the emergence of new regional leaders and centers of competence.

Moderator: Mary Hallward-Driemeier · World Bank Group Analyzing digital transformations using “enriched” Horizon 2020 data

• Alessandro Muscio · Associate Researcher, European Future Innovation System Centre

• Andrea Ciffolilli · Senior Policy Consultant, Ismeri Europa

Discussant: Pierre-Alex Balland · Assistant Professor, Utrecht University Industry 4.0 and Europe’s new geography of knowledge production

• Pierre-Alex Balland · Assistant Professor, Utrecht University

Discussant: Alessandro Muscio · European Future Innovation System Centre 15:30

Coffee Break and Networking

16:00 Technical Session 3. The Market for Industry 4.0 Technologies: What does the European experience show?

Three case studies on the likely disruptions by Industry 4.0 technologies on manufacturing and services in Europe. The first looks into the future of the financial ecosystem in Europe and the implications of blockchain technologies. The second examines how artificial intelligence (AI) applications are transforming healthcare. The third asks how better access to data, markets, and financing by startups in smaller economies could transform the European manufacturing structures and global value chains.

Moderator: Natasha Kapil · Senior Private Sector Specialist, World Bank Group Blockchain Technology: Applications in the European Financial Sector

• Pierre Padilla · Technology Deployment Policy Advisor and Founder, N-ABLE

• Yury Dranev · Associate Professor, Higher School of Economics

Discussant: Mary Hallward-Driemeier · World Bank Group Artificial Intelligence: A case study from Swiss healthcare

• Dominique Foray · Ecole Polytechnique Federale de Lausanne

Discussant: Andrea Ciffolilli · Ismeri Europa Manufacturing a Startup: A case study of Industry 4.0 development in the Czech Republic

• Anwar Aridi · Private Sector Specialist, World Bank Group

Discussant: Julien Ravet · Team Leader – Economic Analysis, Directorate General for Research and Innovation, European Commission

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Day 2

Wednesday, May 29, 2019; WBG Vienna, Praterstraße 31 17th floor, room 17-6, code: 5589+ok

08:45 Welcome Coffee

09:00 Debate. Does Europe need a digital champion?

While America is debating the break-up of some of its big tech companies, Europe is gearing in search of national tech champions to compete with both the US and China. In the U.S., terms such as “Big Tech”, GAFA, and “Fruitful Five” negatively lable the digital industry and expose its ever-growing market power and dominance. China’s national champions such as Huawei are struggling to expand in foreign markets and are under constant pressure. When Europe has only one digital giant (the German SAP $140 bil.) and its hottest tech business is Spotify ($34 bil.), then there must be something wrong with the old continent’s tech ecosystem because big is always better in tech - isn’t it? Better for who? For innovation? For investors? For customers? For balanced growth socially and geographically?

Moderator: Mary Hallward-Driemeier · World Bank Group

Proposers for the motion:

• Indermit Gill · Duke University

• Pierre-Alex Balland · Utrecht University

Opposers against the motion:

• Natasha Kapil · World Bank Group

• Thorsten Posselt · Fraunhofer IMW 09:30 Technical Session 4. The data economy: What is its future in Europe?

The current state of the data economy in Europe, the relative conditions in Europe, North America, and East Asia, and the major challenges to the scale up and diffusion of platforms. The aim of this work is to identify the current trajectory of these technologies and their impact on European

economies.

Moderator: Indermit Gill · Duke University The new data economy: Impacts on Europe and its competitors

• Thorsten Posselt · Director, Fraunhofer Center for International Management and Knowledge Economy IMW

• Riad Bourayou · Research Manager and Research Fellow to the Director, Fraunhofer Center for International Management and Knowledge Economy IMW

• Sebastian Haugk · Researcher, Fraunhofer Center for International Management and

Knowledge Economy

Discussant: Gaurav Nayyar · World Bank Group Digital restrictions, the data economy, and the “servicification” of manufacturing: Results from the Digital Trade Estimates Project

• Erik Van der Marel · European Centre for International Political Economy

Discussant: Pedro de Lima · Head of Economic Studies, EIB 11:00 Coffee Break and Networking

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11:30 Technical Session 5. Operational Technologies: What are their implications for Europe’s

production, productivity, and trade?

Operational technologies such as robotics, 3-D printing, and drones combine data with automation. The fundamental driver is the falling cost of routine functions and the resulting reduction of labor costs. The session will discuss the impact of these technologies on firm productivity, the geography of production, and the size and direction of trade flows. Moderator: Marialisa Motta · Practice Manager, FCI, World Bank Group Robots and the geography of production

• Mary Hallward-Driemeier · World Bank Group

• Gaurav Nayyar · Senior Economist, World Bank Group

Discussant: Thorsten Posselt · Director, Fraunhofer Center for International Management and Knowledge Economy IMW 3D printing and trade flows

• Alen Mulabdic · Analyst, World Bank Group

Discussant: Erik Van der Marel · Senior Economist, European Centre for International Political Economy

13:00

Lunch and Networking

14:30 Closing Session. Key Takeaways and Closing Remarks

A discussion moderated by Marialisa Motta, World Bank Group

This session wraps up the workshop by summarizing the most important messages from the various sessions in order to maximize opportunities resulting from the digital transformation to ensure Europe's global competitiveness, social inclusion, and political integration. All participants of the workshop are invited to voice their takeaways.

15:00- 17:00

Bilateral Meetings End of Workshop

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Participants

Anwar Aridi Private Sector Specialist, Europe and Central Asia (ECA) unit of the Finance, Competitiveness, and Innovation Global Practice, The World Bank Group Anwar specializes in science, technology, and innovation policy issues, private sector development, technology entrepreneurship, and technology transfer. He previously worked as an Economic and Technology Policy Analyst at SRI International Center for Science, Technology, and Economic Development and at the World Bank Middle East and North Africa Country Management Unit.

Pierre-Alexandre Balland Assistant Professor, Utrecht University Pierre-Alex is Assistant Professor of Economic Geography at Utrecht University, Visiting Professor at the Massachusetts Institute of Technology (Media Lab), and fellow at the Centre for Complex Systems Studies. He is an economist by training trying to understand why some parts of the world are rich, other poor, and what we can do about it. On a more applied side, he works with policymakers and companies to solve real-world problems using network analysis and complex systems thinking.

Arup Banerji Regional Director for the European Union countries, The World Bank Group Arup is also a research fellow at the Institute for Labor Economics (IZA) in Bonn, Germany, and an invited member of three of the World Economic Forum's Global Agenda Councils—on Youth Unemployment, on Inclusive Growth and on India. He founded and has co-chaired the global Social Protection Inter-Agency Cooperation Board and is the founding chair of the Solutions for Youth Employment public-private global coalition.

Peter Berkowitz Head of Unit for Smart and Sustainable Growth, Directorate General for Regional and Urban Policy, European Commission Peter is Head of a Unit responsible for coordinating work within the European Commission on smart specialization and regional investment in innovation, environment, energy, climate change, transport and digitalization. From 2008 to 2016, he was Head of Unit for Policy Development, including the preparation and negotiation of the Commission’s proposals for the reform of Cohesion Policy 2014-2020. During his career in the Commission he has worked on enlargement, CAP reform and rural development.

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Riad Bourayou Research Manager and Research Fellow to the Director, Fraunhofer Centre for International Management and Knowledge Economy Riad has worked for several years as a research fellow in Germany and Brazil in the areas of remote sensing, optical systems and biomedical imaging. In 2011, he began working as a freelance scientific consultant and supported research institutes with their innovation projects. He is also employed at the Chair of Innovation Management and Economics at the University of Leipzig. Philipp Brutscher Senior Economist in the Economics Department, European Investment Bank Philipp is principally responsible for the EIB Investment Survey, a large scale survey of corporate investment activities. He acts as focal point for the Department’s analytical work on business and infrastructure investment activities.

Andrea Ciffolilli Senior Policy Consultant, Ismeri Europe Andrea has twelve years of experience in research, policy analysis and evaluation. His fields of specialization include: Regional Policy co-financed by the EU; Research, Technological Development and Innovation Policy. Andrea was a member of the core team of the Expert Evaluation Network delivering policy analysis on the performance of Cohesion policy in 2007-2013, and has carried out several projects for DG Regional Policy and DG Research and Innovation. At national and regional level, he has worked on a number of ex ante, mid-term and ex post evaluations of Operational Programmes, with a particular focus on research and innovation initiatives. Xavier Cirera Senior Economist, Finance, Competitiveness & Innovation (FCI) Global Practice, The World Bank Group Xavi has more than 15 years’ experience working in different microeconomic areas of development; including innovation and entrepreneurship policies, productivity, firm level dynamics, trade policy and competitiveness. His most recent research work focuses on the measurement of firm-level innovation, the relationship between innovation, productivity and employment; and on productivity and firm dynamics. His most recent policy work centers around the evaluation of innovation and entrepreneurship policies, leading the development of the public Expenditure Reviews in Science, Technology and Innovation implemented in Colombia, Chile and the Ukraine.

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Jesus Crespo Professor of Economics, Vienna University of Economics and Business Jesus is a Professor of Economics at the Vienna University of Economics and Business (WU), Director of Economic Analysis at the Wittgenstein Centre for Demography and Global Human Capital (WIC), as well as a Research Scholar at the International Institute of Applied Systems Analysis (IIASA). His research interests are macroeconomics and applied econometrics. From 2013 until 2018, he practiced also as an Adjunct Professor at the Norwegian School of Economics. He has published numerous articles in renowned scientific journals and acts as a scientific consultant to the World Bank and the Austrian Institute of Economic Research.

Yury Dranev Associate Professor, National Research University, Higher School of Economics Yury works at the Institute for Statistical Studies and Economics of Knowledge, Higher School of Economics (HSE), Moscow, as the Head of Quantitative Modelling Unit, Leading Research Fellow and Associate Professor (at School of Finance) since 2009. While working at HSE, he participated in tens of research and consulting projects including: developing a blockchain technology road map; science and technology foresight for the financial sector; quantitative analysis of perspective markets related to financial technologies. He previously worked in banks and asset management firms for more than 10 years as head of investments, portfolio manager, financial analyst and trader.

Wolfgang Fengler

Lead Economist, Finance, Competitiveness & Innovation (FCI) Global Practice, The World Bank Group Wolfgang has been a staff member of the World Bank for more than 18 years, during which he lived in four continents: First in North America working at the World Bank’s headquarters in Washington D.C., then in Asia as a Senior Economist in the Indonesia office, followed by Africa, where he served as the World Bank’s Lead Economist in the Nairobi office. Finally, he moved to Europe as part of the senior team of the World Bank’s new hub in Vienna. Prior to joining the World Bank, he set up Africa Consulting, LLC, and was a Fellow at the Research Institute for International Relations. 

Dominique Foray Full Professor at the Ecole Polytechnique Fédérale de Lausanne (EPFL), Switzerland In addition to being a Full Professor at EPFL, Dominique holds the Chair of Economics and Management of Innovation (CEMI) and serves as Dean of the Management School at EPFL. He is a member of the Science Council of Switzerland (SSC), chairman of the board of the Swiss Economic Research Institute in Zürich (KOF) and a foreign member of the Center of Capitalism and Society (Columbia University, New York). His areas of expertise include the economics of innovation and knowledge and the economic policy implications of the new knowledge-based economy.

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Linda Van Gelder Regional Director for the Western Balkans, The World Bank Group Linda has held the position since July, 2017, and is responsible for leading the dialogue on economic reform with the six countries of the Western Balkans, developing the World Bank’s country strategies, managing the World Bank portfolio, coordinating with partners, and engaging in outreach on economic growth and poverty reduction in the Western Balkans. Indermit Gill Professor of Practice of Public Policy in the Sanford School of Public Policy Indermit’s areas of expertise are economic growth, public finance, social security, economic geography and Europe. He was formerly director for development policy in the Office of the Chief Economist at the World Bank in Washington, D.C. He has held a number of leadership positions at the World Bank, including chief economist for Europe and Central Asia and staff director for the 2009 World Development Report on Economic Geography. He also was economic adviser in the World Bank’s East Asia and Pacific Regional Office and lead economist for human development in Latin America and the Caribbean.

Elisabeth Gruber Director, Department for International Financial Institutions, Austrian Federal Ministry of Finance Elisabeth has been Director of the Department in Vienna since 2017. Previously, she was Senior Advisor responsible for the World Bank Group portfolio and working on issues related to multilateral development finance. From 2008 to 2010, she served as Alternate Executive Director at the Inter-American Development Bank in Washington, D.C. Prior to this, she was policy advisor of the Asian and the Inter-American Development Bank and responsible for multilateral debt relief at the Ministry of Finance in Vienna. Before joining the Ministry, she worked as University Assistant at the Department of Economic Development at the University of Economics in Vienna.

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Mary Hallward-Driemeier Senior Economic Adviser, Finance, Competitiveness & Innovation (FCI) Global Practice, The World Bank Group Mary oversees the analytical agenda on issues of private sector development, technology and productivity. She has published widely on entrepreneurship, firm productivity and firm dynamics, the impact of financial crises, and women's economic empowerment. She has served as an advisor to the Chief Economist of the World Bank, a co-manager of the Jobs Group, the Deputy Director for the World Development Report 2005: A Better Investment Climate for Everyone and is a founding member of the Microeconomics of Growth Network.

Sebastian Haugk Researcher, Fraunhofer Center for International Management and Knowledge Economy

Sebastian has been working as a researcher for the Price and Service Management Unit at the Fraunhofer Center for International Management and Knowledge Economy in Leipzig since April 2016. In addition to his studies, Mr. Haugk worked for several years as a research assistant in various positions at the University of Leipzig. Since October 2012, Mr. Haugk has been further employed as a research assistant at the University of Leipzig’s Chair of Business Administration, with a focus on service management.

Michael Hirschbrich Co-Founder and Chief Executive Officer, Updatemi

Michael is Co-Founder and serves as Chief Executive Officer at Updatemi, IWA Technologies Inc., Talenthouse, Inc., and Kronomy, Inc. Mr. Hirschbrich was able to collect first experiences in the IT sector as key account manager and marketing consultant of the ACP-Group. As a self-employed IT entrepreneur, he has been successful in this business sector over a time span of more than 10 years within M-Age Consulting.

Natasha Kapil Senior Private Sector Specialist, Finance, Competitiveness, and Innovation (FCI) Global Practice, The World Bank Group Natasha specializes in issues of competitiveness, innovation, and growth entrepreneurship. Currently with the East Asia region, she brings over 15 years of operational and policy making experience from Europe and Central Asia, Latin American, South Asia, and Africa. Natasha brings a strong commitment to delivering bespoke client solutions, and is an avid advocate of piloting cutting-edge approaches and evidence-based policy making, and has integrated impact evaluation approaches in prominent tech entrepreneurship programs with national innovation agencies.

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Pedro de Lima Head of the Country and Financial Sector Analysis Division at the Economics Department, European Investment Bank Pedro is responsible for country and financial sector analysis in both EU and non-EU countries; country risk assessment; financial sector monitoring; support of EIB’s financial sector operations; and technical assistance work. Additionally, he has been teaching courses on Derivatives and Risk Management at the Luxembourg campus of John F. Welch College of Business, Sacred Heart University since 2009.

Erik van der Marel Senior Economist, European Centre for International Political Economy (ECIPE) In addition to his job at ECIPE, Erik is Associate Professor at the Solvay Brussels School of Economics and Management and a Consultant Economist for the World Bank. His area of specialization is international trade; in particular, emerging and intangible trade, such as trade in services, digital trade, as well as cross-border data flows. He has also gained various professional experiences as a consultant at the European Commission (DG Internal Market), OECD, APEC, and as a lecturer at the London School of Economics where he taught International Political Economy and The Political Economy of International Trade at post-graduate level. Marialisa Motta Practice Manager, Europe and Central Asia (ECA) unit of the Finance, Competitiveness, and Innovation Global Practice, The World Bank Group Marialisa’s interests and areas of focus include competitiveness, investment climate, innovation, financial inclusion, results measurement and impact evaluation. She has advised more than 20 countries around the world on these topics. Prior to taking her current position, she was responsible for Finance and Private Sector Development work in the Latin American and Caribbean Region, and prior to that she managed the joint World Bank-IFC Investment Climate Reform Advisory Global Unit, which provided advice on business regulations and reforms measured by the Doing Business report in more than 50 countries around the world.

Alen Mulabdic Analyst, Macroeconomics, Trade and Investment (MTI) Global Practice, The World Bank Group Alen works on issues related to international trade and macroeconomics with a focus on Regional Integration. His recent research concentrates on the impact of deep forms of trade integration, the trade effects of the diffusion of new technologies, and the consequences of large transport infrastructure projects, such as the Belt and Road Initiative. Alen has also worked on the interplay between trade shocks and civil conflicts, trade barriers in government procurement markets, and the trade impact of Brexit. His work has been cited, among others, in the Economist, Financial Times, and Guardian.

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Alessandro Muscio

Associate Researcher, European Future Innovation System Centre (EFIS) Alessandro is Associate Professor in Applied Economics at the University of Foggia (Italy). Mr. Muscio worked as Science & Technology Policy Specialist at Technopolis Group, UK Office. As part of his work at Technopolis Group, he was involved in several studies in the area of science and industry policy evaluation, commissioned by the European Commission and national government agencies.

Gaurav Nayyar Senior Economist, Finance, Competitiveness and Innovation (FCI) Global Practice, The World Bank Group Gaurav is a Senior Economist at the World Bank, where he joined as a Young Professional in 2013. Previously, he was an Economics Affairs Officer in the Economic Research Division of the World Trade Organization, where he co-led the World Trade Report 2013, Factors Shaping the Future of World Trade. Gaurav’s research interests lie primarily in the areas of economic growth, structural transformation, trade, firm productivity, and poverty reduction, and he has published in a variety of academic journals on these issues.

Pierre Padilla Technology Deployment Policy Advisor and Founder of N-ABLE Pierre is the Founder of N-ABLE, a company dedicated to the deployment of digital technologies. As a Policy Advisor, he has advised a broad range of clients (European Commission, OECD, national/regional governments, private sector, clusters, etc.). He has also directed and contributed to projects on digital technology entrepreneurship and deployment at all government levels.

Thorsten Posselt Director of the Fraunhofer Centre for International Management and Knowledge Economy Thorsten is also a professor for innovation management and innovation economic at the University of Leipzig. His main areas of research expertise and interest are innovation management, innovation economics and innovation policy, as well as service management and economics. He is a member of various institutions, such as the European Academy of Sciences and Arts.

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Julien Ravet Team leader for economic analysis, Chief Economist unit of the Directorate-General for Research and Innovation, European Commission Julien has been in charge of the overall steering and coordination of the Impact Assessment of Horizon Europe and of the monitoring of Horizon 2020. He is also an associate fellow and lecturer at the Solvay Brussels School of Economics and Management. He previously worked as a senior consultant for R&I policy in the private sector, as an economist at the Belgian Science Policy Office and as a researcher at the Université Libre de Bruxelles.

Alexandra Soininen Consultant, Finance, Competitiveness & Innovation (FCI) Global Practice, The World Bank Group Alexandra focuses on analytical, research and operational work across the Europe and Central Asia region. She first joined the Bank in 2013 as a Junior Professional Associate in the Central Asia Country Management Unit, and provided cross-support for the Climate Change unit. She has also worked in an investment advisory in Kuala Lumpur, Malaysia, and completed internships at the European Parliament and Finland’s Permanent Representation to the EU.